Insurance Industry: Travel Premiums

Baroness Altmann Excerpts

Tuesday 28th June 2022 Lords Chamber

[Baroness Penn (Con)]

I think I have explained one action that the regulator has already taken in respect of this question, on the signposting agreement that came into place in April last year. The FCA has also acted on general insurance pricing practices, where it was found that existing customers renewing their insurance were being charged unfair rates so that insurers could offer new deals to people who were prepared to move. As I said, the FCA has taken action on that front. Since 1 January 2022, new rules have been in place. As I also said, the Government have the Financial Inclusion Policy Forum, bringing together market operators and the regulator to look at questions of financial inclusion and see what we can do. The Government publish an annual report on the action taken within that forum.

[Baroness Altmann (Con)]

My Lords, I am conscious that my noble friend finds herself in a difficult position—it is usually for the regular and the industry itself to behave appropriately. Have the Government asked the regulator to make inquiries about the pricing of insurance? It is notoriously opaque in justifying risk margins, profit margins and the ways pricing structures are determined. It sometimes feels like a free-for-all in the market.

[Baroness Penn (Con)]

As I just pointed to, a quite significant reform was put in place in January this year regarding general insurance pricing practices. These measures are intended to improve the way that insurance markets function and reduce harm for consumers affected by price walking. We want to see how those reforms operate and bed in over time, but I gave a commitment to the noble Lord, Lord Sharkey, to communicate with the FCA about its assessment of the market in relation to age. I will get back to noble Lords.